A Little Wasteful Spending Goes a Long Way, the Wrong Way

Wasteful spending occurs on all levels. Many people associate going out to eat as a wasteful expense. However, few people think about whether they spend too much on their daily groceries. These small, little, wasteful expenses can end up taking you down the wrong financial path.

Smart Shopping and Investments

Smart shopping, even moderately used, can save 10 percent on a grocery bill. Many coupon users save even more, but this 10 percent target is fairly easy to hit. For a family of four, a grocery bill can total $250 a week. This means you could save $25 each week through smarter shopping.

That $25 a week amounts to $100 a month or $1,200 each year. Conservatively invested in a simple CD, this could earn an additional 3 percent yield annually. Compounded monthly, this $1,200 becomes $1,394 after just 5 years.

After 10 years, the CD would hold $1,619. This is savings from just one year of grocery shopping. Saving the money over a 5-year period, you could easily save $8,000. You have increased your purchasing power for a home, car or college tuition by $8,000 simply by cutting $25 a week out of your grocery expense.